AND WHEREASon or about August 7, 2015, Maritime Electric filed
an application with the Commission seeking to amend rates of
depreciation with respect to Maritime Electric's several classes of
property for the period beginning January 1, 2016 (Commission Docket
UE#21603) ("Depreciation Rate Application");

AND WHEREAS
on or about October 28, 2015, Maritime Electric filed an application
with the Commission seeking to approve proposed amendments to the
rates, tolls and charges for electric service for the period
beginning March 1, 2016 (Commission Docket UE#20942) ("General Rate
Application");

AND WHEREASpublic comment was received and interrogatories were
exchanged with respect to the foregoing Applications;

AND WHEREASon or about January 29, 2016, Maritime Electric
advised the Commission that it has the ability to procure access to
50 MW of firm capacity and accordingly withdrew its CT4 Application
in Commission Docket UE#20723, which withdrawal has been accepted by
the Commission;

AND WHEREASon or about January 29, 2016, Maritime Electric filed
with the Commission an agreement between Maritime Electric and the
Government of Prince Edward Island ("Agreement"), which Agreement
addresses the matters raised in the General Rate Application and the
Depreciation Rate Application, as well as other matters relating to
electric service in the Province of Prince Edward Island;

AND WHEREAS on or about January 29, 2016, the Commission issued a
procedural Order directing that the Depreciation Rate Application be
consolidated and heard together with the General Rate Application as
part of Commission Docket UE#20942;

TAKE NOTICE that, pursuant to Section 20 of the Electric Power
Act, R.S.P.E.I. 1988, Cap. E-4, Maritime Electric seeks the
Commission's approval of the Agreement as part of its General Rate
Application, Commission Docket UE#20942.

TAKE FURTHER NOTICE that the Agreement amends Maritime Electric's initial
filing in its General Rate Application, and in particular, amends
the proposed rates, tolls and charges for electric service filed
therein.

BACKGROUND

Since March 1, 2011, electricity rates in PEI have
been legislated under amendments to the Electric Power Act as
part of the PEI Energy Accord between the Government of PEI and
Maritime Electric. The rates legislated in accordance with the PEI
Energy Accord will expire on February 29, 2016. As a result,
Maritime Electric seeks to have the rates, tolls and charges for
electric service amended effective as of March 1, 2016.

DETAILS

Through public comment and interrogatories in the
General Rate Application, the Depreciation Rate Application, and the
CT4 Application, various issues were identified with respect to
electric service in the Province of PEI. The Government of PEI (as
represented by the Minister of Transportation, Infrastructure and
Energy) and Maritime Electric have entered into a three (3) year
Agreement that is intended to address certain issues identified by
the parties. The Agreement is subject to the review and approval of
the Commission as part of Commission Docket UE#20942.

The Agreement, if approved by the Commission, will
commence effective March 1, 2016 and will expire on February 28,
2019. The key terms of the Agreement are as follows:

The maximum increase in
the cost of electricity for the typical electrical customer will
be:

2.3% as of March 1,
2016,

2.3% as of March 1,
2017,

2.3% as of March 1,
2018.

A return on rate base
resulting in a 9.35% return on average common equity shall be
approved for Maritime Electric for each year of the Agreement.

In the event Maritime
Electric's return on average common equity exceeds the
authorized amount, the excess earnings shall be returned to
Maritime Electric's customers commencing March 1, 2019 as
directed by the Commission.

Consideration of
changes to the multi-block residential energy pricing structure,
and related changes to Maritime Electric's other rate
structures, shall be deferred until termination of the
Agreement.

Maritime Electric shall
adopt depreciation rates calculated as of January 1, 2016, as
proposed in the Depreciation Rate Application. The depreciation
rates shall remain in effect until the later of February 28,
2019 or until varied by the Commission.

The submarine cable
Interconnection Upgrade Project shall continue to proceed and
the costs of the Project shall be recovered from Maritime
Electric's customers.

None of the provisions
contained in the Agreement shall be enforceable unless and until
all of the provisions of the Agreement are either approved by
the Commission or legislatively authorized by amendments to the
Electric Power Act, or a combination thereof.

HOW TO SEE THE
AGREEMENT

A complete copy of
the Agreement can be obtained by clicking
here. The pre-filed
evidence in the General Rate Application and the Depreciation Rate
Application is available on the Commission’s website at
www.irac.pe.ca.

PUBLIC HEARING

A
public hearing will be held with respect to the General Rate
Application and the Depreciation Rate Application. The Agreement
will be considered as part of the hearing.

The public
hearing will commence at 9:30 am on Thursday, February 25, 2016
in the Commission's main hearing room, located on the 5th Floor of
the National Bank Tower, 134 Kent Street, Charlottetown, Prince
Edward Island.

HOW TO COMMENT

Any interested
party wishing to have formal standing to present evidence under oath
or to cross-examine witnesses may apply to the Commission for
intervener status. In order to be considered, applications for
intervener status must be made in writing and received by the
Commission no later than 4:00 pm on Tuesday, February 16, 2016.

Any person
wishing to make a verbal submission to the Commission, but who does
not intend to call evidence or cross-examine witnesses may do so at
the evening session of the hearing, which is scheduled to commence
at 7:00 pm on Thursday, February 25, 2016. Persons wishing to
speak at the evening session must register with the Commission, in
writing, no later than 4:00 pm on Tuesday, February 16, 2016.
Only persons who have registered in advance will be permitted to
make a verbal submission. Presentations at the evening session will
follow the order in which interested persons register with the
Commission.

Any person
wishing to comment on the matter, but not intending to appear at the
hearing, may write to the Commission at the address below. In order
to be considered, written comments must be received by the
Commission no later than 4:00 pm on Thursday, February 18, 2016.
All comments will be made public on the Commission website at
www.irac.pe.ca.

FOR ADDITIONAL INFORMATION

All Orders
issued in this matter will be posted on the Commission’s website at
www.irac.pe.ca.

Additional
information on the General Rate Application, the Depreciation Rate
Application and the Agreement can be obtained by contacting Maritime
Electric at 902-629-3756. Written communications should be forwarded
to:

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